Pre-Market Brief: Stocks Give Up Overnight Gains as the U.S. Will Ban Russian Energy Exports

Morning Markets

March S&P 500 futures this morning gave up an overnight rally and are down by -0.18%.  Stocks indexes retreated this morning as crude prices jumped more than +4% after Bloomberg reported the U.S. would impose a ban on Russian energy products, including crude oil, liquified natural gas, and coal. Stock indexes in overnight trade initially rallied after Bloomberg reported that the European Union is considering joint bond sales to finance energy and defense spending.

U.S. economic data today was bearish for stocks after the U.S. Jan trade deficit expanded to a record -$89.7 billion (data from 1992), wider than expectations of -$87.3 billion.

The Euro Stoxx 50 index today is up by +0.27% on signs the European Union may boost stimulus.  Bloomberg reported today that the European Union would unveil a plan as soon as this week to jointly issue bonds to finance energy and defense spending to cope with the fallout from Russia's invasion of Ukraine.  European stocks fell back from their best levels after crude prices jumped more than +4% after the U.S. said it would ban imports of Russian energy.  European stocks were also undercut after Bank of America cut its Eurozone 2022 GDP forecast and raised its Eurozone inflation forecast.

Today’s Eurozone economic data was supportive for stocks after German Jan industrial production rose +2.7% m/m, stronger than expectations of +0.5% m/m and the largest increase in 15 months.

Bank of America cut its Eurozone 2022 GDP forecast to 2.8% from a prior view of 3.5% and raised its Eurozone 2022 inflation forecast to 6.0% from a prior forecast of 4.4%, citing the fallout of the war in Ukraine.

The London Metal Exchange suspended trading in nickel today after a short squeeze drove prices as much as 111% higher to a record high above $100,000 a ton.  Concern that sanctions against Russia will curb global nickel supplies has sparked a short squeeze in the metal.  Russia’s MMC Norilsk Nickel PJSC is the largest nickel producer in the world.

Russia said it will keep its stock market closed until at least Wednesday, which would be the longest the Russian stock market has ever been closed.   Today, the offshore ruble is trading at 138.79 rubles/USD, moderately above Monday’s record low of 177.36 rubles/USD.

Asian markets today closed sharply lower for a second day.  China’s Shanghai Composite fell to a 16-month low and closed down -2.25%, and Japan’s Nikkei Stock Index dropped to a 16-month low and closed down 1.71%.  Asian stock markets retreated on concern the surge in commodity prices due to war in Ukraine will undercut global growth prospects and boost inflation pressures.  Chinese real estate stocks also declined today after Yuzhou Group said it defaulted on an interest payment on a dollar bond that came due. 

Pre-Market U.S. Stock Movers

Bank of America (BAC) gained more than +1% in pre-market trading after Baird Securities raised its recommendation on the stock to neutral from underperform. 

ArcelorMittal (MT) climbed nearly +5% in pre-market trading as the price of nickel soared to a record high and boosted mining stocks exposed to nickel. 

Arena Pharmaceuticals (ARNA) rose more than +3% in pre-market trading just before the expiry on March 9 of the current waiting period for its proposed acquisition by Pfizer.

Clarus (CLAR) jumped +11% in pre-market trading after it reported Q4 sales of $118.2 million, better than the consensus of $105.7 million. 

Nine Energy Service (NINE) surged more than +60% in pre-market trading after it reported Q4 revenue of $105.1 million, well above the consensus of $78.9 million.

908 Devices (MASS) rallied +13% in pre-market trading after it reported Q4 revenue of $15.8 million, above the consensus of $15.1 million.

Rover Group (ROVR) tumbled -13% in pre-market trading after it forecast 2022 revenue of $160 million-$180 million, below the consensus of $200.3 million.

ThredUp (TDUP) dropped -11% in pre-market trading after it forecast Q1 revenue of $70 million-$72 million, weaker than the consensus of $76.9 million. 

Today’s U.S. Earnings Reports (3/8/2022)

ABM Industries Inc (ABM), Accelerate Diagnostics Inc (AXDX), Agiliti Inc (AGTI), American Vanguard Corp (AVD), Anika Therapeutics Inc (ANIK), Aterian Inc (ATER), Avid Bioservices Inc (CDMO), Babcock & Wilcox Enterprises I (BW), Barnes & Noble Education Inc (BNED), Casey's General Stores Inc (CASY), Century Casinos Inc (CNTY), Civitas Resources Inc (CIVI), CytoSorbents Corp (CTSO), Del Taco Restaurants Inc (TACO), Desktop Metal Inc (DM), Dick's Sporting Goods Inc (DKS), DoubleVerify Holdings Inc (DV), Fathom Holdings Inc (FTHM), Figs Inc (FIGS), Fluent Inc (FLNT), Full House Resorts Inc (FLL), GoHealth Inc (GOCO), Greenlight Capital Re Ltd (GLRE), Guidewire Software Inc (GWRE), Harvard Bioscience Inc (HBIO), HCI Group Inc (HCI), Hemisphere Media Group Inc (HMTV), Invacare Corp (IVC), John Wiley & Sons Inc (JW/A), Kopin Corp (KOPN), Laird Superfood Inc (LSF), MongoDB Inc (MDB), Nature's Sunshine Products Inc(NATR), Neuronetics Inc (STIM), Olaplex Holdings Inc (OLPX), Ontrak Inc (OTRK), Paragon 28 Inc (FNA), PAVmed Inc (PAVM), Petco Health & Wellness Co Inc (WOOF), PROCEPT BioRobotics Corp (PRCT), Pulse Biosciences Inc (PLSE), RxSight Inc (RXST), Stagwell Inc (STGW), Stitch Fix Inc (SFIX), Sumo Logic Inc (SUMO), W&T Offshore Inc (WTI), Yext Inc (YEXT).